Tuesday, October 13, 2015

Financial Elder Abuse Costs $3 Billion a Year. Or Is It $36 Billion?

Financial elder abuse—broadly defined as
the illegal or improper use of the funds, property, or assets of people
60 and older by family, friends, neighbors, and strangers—costs older
people and their families billions of dollars. But how many billions?
That's subject to debate.

When Consumer Reports recently reported on elder financial fraud, Lies, Secrets, and Scams: How to Prevent Elder Abuse, we used the number $3 billion. It comes from a study published in 2011
by the MetLife Mature Market Institute, in collaboration with the
National Committee for the Prevention of Elder Abuse and the Center for
Geronotology at Virginia Polytechnic Institute and State University.

The MetLife study's methodology involved reviewing news articles
mentioning elder financial abuse committed by strangers; family,
friends, and neighbors; and the business sector, as well as Medicaid and
Medicare fraud.

We chose that figure because a number of experts we interviewed
thought it was a credible figure.

But they—and an author of the
study—admitted to us when we first reported it a couple of years ago that the figure probably represents the tip of the iceberg. The figure is probably far larger than that.

Other, Much Higher Estimates

At the other end of the scale, TrueLink,
a company that provides account-monitoring software for elders and
their families, has projected that financial elder abuse costs families
more than $36 billion a year,
12 times the MetLife estimate. TrueLink arrived at its estimate by
surveying family caregivers of older people. TrueLink CEO Kai
Stinchcombe says that abuse committed by strangers—the main topic of our article—is more than $29 billion.

The TrueLink study used a broad definition of financial elder abuse.
It included exploitation (about $17 billion), in which fraudsters
operate openly, claiming victims' consent; examples are quack weight
loss or dietary products, work-from-home schemes, hidden shipping and
handling or subscriptions, and misleading financial advice. It also
included a loss of $12.76 billion from criminal fraud (anonymous con
artists and identity thieves), and $6.67 billion from abuse by
caregivers: family members, and others exploiting a trusting
relationship.

These figures were compelling, especially given that TrueLink
consulted experts from the respected Financial Fraud Research Center at
the Stanford Center on Longevity. When I spoke with Martha Deevy,
director of the center's financial security division, however, she noted
that she and her colleagues didn't write the survey. "We gave them
input regarding how to frame the questions," she said. "We believe the
challenge with the TrueLink numbers was the way they extrapolated and
generalized across the population and think that should have been
questioned in a peer-reviewed journal."

On the other hand, Deevy noted, the MetLife results may have been too
conservative. "I think they leaned on the pieces of evidence they could
authentically count," she said. "But people misrepresent how much they
lost. A large percentage of victims are not reporting at all."

A problem with both estimates, Deevy says, is that there's no
standardized way to define fraud types. She and her colleagues are
working on a taxonomy that she hopes will be used by all professionals
who deal in the field, including researchers; law enforcement; consumer
protection advocates; and adult protective services workers. (Continue Reading)

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NASGA (National Association to STOP Guardian Abuse, Inc.) is a 501(c)(3) public-interest, civil rights organization formed by victims of unlawful and abusive guardianships and conservatorships. We seek legislative reform of existing law and upgrading of criminal penalties for court-appointed fiduciaries misusing protective proceedings for unjust enrichment and engaging in elder and family abuse.

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